BSD.L Regulatory News (BSD)

Emblaze Ltd (LSE:BLZ) ("Emblaze" or "the Company") INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2013 Herzeliya, Israel, 13 August 2013: Emblaze Ltd. today announces itsunaudited financial results for the six month period ended 30 June 2013 (the"Reported Period"). All references to $ are to US Dollars. Financial Highlights: - Cash position with cash and short term investments of $143 million; - Company has purchased 923,898 of its own shares in an amount of $687,000;- Revenue for the period ending 30 June 2013 totaled $1.1 million (2012: $0.9 million). Naftali Shani, Chairman of Emblaze, commented: "The Company remainsin strong cash position. Going forward we will continue to focus onprofitability and growth and we look forward to reporting on progress in thenear future. A copy of the Company's interim results for the six months ended 30June 2013 will shortly be available for inspection at the National StorageMechanism, which is located at www.hemscott.com/nsm.do The report is also available on the Company's website, www.emblaze.com Information in this announcement is based upon unaudited managementaccounts. In addition, certain statements made are forward looking statements.Such statements are based on current expectations and are subject to a numberof risks and uncertainties that could cause actual events or results to differmaterially from any expected future events or results referred to in theseforward looking statements. Enquiries: Piers Coombs/ Kit Stephenson Canaccord Genuity Ltd. +44 20 7523 8000 Emblaze is traded on the London Stock Exchange (LSE: BLZ) since 1996. www.emblaze.com Emblaze holds EMOZE Ltd., an acknowledged world leader, providing transparent, synchronizedmobile push messaging and push content solutions for handset manufactures, mobile operatorsand enterprises. EMOZE supports all major email providers, instant messaging services andsocial networks. EMOZE push messaging solution is based on EMOZE patented technology andprovides real push experience combined with an efficient mechanism, minimizing both datatraffic and battery consumption to all mobile devices (feature-phones and smart-phones).EMOZE architecture is based on reliable, redundant, scalable server-technology that offersa low TCO and quick-to-market deployment. www.emoze.com Review EMOZE Ltd. Emoze Ltd., a 95 per cent. subsidiary of Emblaze, is a provider ofmobile push messaging and push content solutions for handset manufactures,mobile operators and enterprises. EMOZE is constantly evaluating how to adjustand better position its activity and offering in view of market trends and theincreasing share of Smartphones in the market. Intellectual Property In July 2010, Emblaze filed a complaint against Apple Inc. forinfringement of the Company's U.S. Patent No. 6,389,473 through Apple's HTTPLive Streaming protocol used in Apple products such as iPhones and iPads[1]. In October 2012, the Company filed a complaint for patentinfringement against Microsoft Corporation ("Microsoft"). The complaintasserts that Microsoft's IIS Smooth Streaming system infringes Emblaze's U.S.patent No. 6,389,473 for media streaming technology[2]. Legal proceedings in these two cases are ongoing. Share repurchase program On 19 March 2013 the Company resumed a share repurchase programme,which was previously approved by the Company's board of directors up to amaximum consideration of US$2 million. The repurchase program was undertaken in accordance with IsraeliCompanies Law, the FSA Listing Rules (the "Listing Rules") and the CommissionRegulation (EC) No 2273/2003 (the "EC Buy-back Regulations"). The program wasimplemented by way of market purchases of the Company's own shares fortransfer into Treasury. In accordance with the Listing Rules, the maximumprice which may be paid by the Company was not more than the higher of (i) anamount equal to 105% of the average market closing price (as derived from theLondon Stock Exchange Daily Official List) for the five dealing daysimmediately preceding such purchase; and (ii) the amount stipulated by Article5(1) of the EC Buy-back Regulations, exclusive of expenses. The Company now holds 30,587,902 of its shares in Treasury,including shares which have been purchased up until the end of the interimperiod but registered after June 30, 2013. Following the share repurchase, thenumber of shares in issue (excluding shares held in Treasury) is now109,990,252. The total issued share capital of the Company as at June 30, 2013is 140,578,154. Trading since the end of June 2013 has shown a similar trend to the preceding six months. Risks and Uncertainties The Board's primary focus areas when reviewing key risks anduncertainties considers strategic, operational and financial risks andidentifies actions to mitigate those risks. Pursuant to the requirements ofthe Disclosure and Transparency Rules the Company provides the followinginformation on its principal risks and uncertainties, in addition to thosedetailed in the Company's 2012 Annual Report and Accounts, which areincorporated hereto as an integral part of this review: - The continuing challenges in macro-economic environment andturbulence in the overall financial markets economy as well as the drive forour technology solutions and products directly or indirectly by consumerdemand and preferences - all of which may have an impact on the Company'sbusiness;--------------------------------- [1] Apple, iPhone and iPod Touch iPad and Snow Leopard are proprietarynames of Apple Inc. [2] Microsoft, IIS Smooth Streaming and Windows Azure Media Servicesare proprietary names of Microsoft Corporation. - Investment efficiency: the Company's growth is dependent oncreating a portfolio of quality options and investing in the best options.Ineffective strategy, investment selection and/or subsequent execution couldlead to loss of opportunity, loss of value and higher capital expenditure; - People and capability: the Company relies on recruiting andretaining high-quality employees to execute its strategic plans and to operateits business. In addition, management attention continues to be required inthe ongoing management of the intellectual property claims filed by theCompany against third parties, as well as responding to matters related to theclaims brought against the Company, and some of its directors and officers, inthe context of a former director's bankruptcy proceedings and personalfinancial affairs (see Note 4 for further information). Key managementpersonnel will need to continue to devote attention to these matters, whichmay negatively impact on their capability to timely and effectively addressother operational matters unrelated to the litigations; - Shareholders support: the lack of shareholders' support couldpossibly result in impairment of the board's ability to execute its plannedmandate. The directors monitor the key risks and uncertainties and the boardwill take appropriate actions to mitigate these risks and their potentialoutcomes. These actions include close review and monitoring of the economicenvironment to ensure the business can respond appropriately to changes intrading conditions, careful management of costs across all areas of thebusiness with increased expenditure only in those areas that the board decidesare appropriate to drive growth and deliver long term strategic benefits, aswell as maintaining focus on establishing the Company's position as a leadingprovider of innovative technology and advanced, high quality solutions. Related party transactions Transactions between the Company and its subsidiaries, which arerelated parties, have been eliminated on consolidation. Directors' responsibilities Responsibility statement of the directors in respect of the half-yearlyfinancial report: We confirm that to the best of our knowledge: - the unaudited financial results for the six month period ended 30June 2013 have been prepared in accordance with IFRS. These results follow theguidelines of IAS 34 Interim Financial Reporting as adopted by the EU, whichdefines the minimum content of an interim financial report as includingcondensed financial statements and selected explanatory notes. The interimfinancial report is intended to provide an update on the latest complete setof annual financial statements. Accordingly, it focuses on new activities,events and circumstances, and does not duplicate information previouslyreported, except for completeness. - the interim management report includes a fair review of theinformation required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being anindication of important events that have occurred during the first six monthsof the financial period and their impact on the condensed set of financialstatements; and a description of the principal risks and uncertainties for theremaining six months of the period; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, beingrelated party transactions that have taken place in the first six months ofthe current financial period and that have materially affected the financialposition or performance of the entity during that period; and any changes inthe related party transactions described in the last annual report that coulddo so. By order of the Board, Naftali Shani Chairman EMBLAZE LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands June 30, December 31, 2013 2012 Unaudited AuditedASSETS CURRENT ASSETS:Cash and cash equivalents $ 6,337 $ 9,333Short-term deposits 112,100 122,000Financial assets at fair value throughprofit or loss 24,362 13,360Available for sale financial assets 205 215Restricted deposits 199 195Accrued interest receivable 699 966Prepaid expenses and other receivables 911 1,001 Total current assets 144,813 147,070 NON-CURRENT ASSETS: Equipment, net 62 67 Total assets $ 144,875 $ 147,137 EMBLAZE LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands June 30, December 31, 2013 2012 Unaudited AuditedLIABILITIES AND EQUITY CURRENT LIABILITIES:Trade payables $ 289 $ 268Deferred revenues and accrued expenses 3,463 4,341 Total current liabilities 3,752 4,609 NON-CURRENT LIABILITIES: Employee benefit liabilities, net 24 34 EQUITY: Share capital 416 416Share premium 469,931 469,911Treasury shares (76,962) (76,275)Other capital reserve 122 132Accumulated deficit (252,035) (251,346) Equity attributable to Company's equity holders 141,472 142,838 Non- controlling interest (373) (344) Total equity 141,099 142,494 Total liabilities and equity $ 144,875 $ 147,137 EMBLAZE LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME U.S. dollars in thousands, except share and per share data Six months ended Year ended June 30 December 31 2013 2012 2012 Unaudited Audited Revenues $ 1,065 $ 893 $ 2,149Cost of sales 272 224 525 Gross profit 793 669 1,624 Operating expenses:Research and development 761 820 1,751Selling and marketing 134 376 800General and administrative 1,549 1,375 2,620 Total operating expenses 2,444 2,571 5,171 Operating loss (1,651) (1,902) (3,547) Financial income 883 1,244 2,460Financial expense (110) (26) (58)Other income - 2,002 2,061 Net income (loss) from continuing operations (878) 1,318 916Net income (loss) from discontinuedoperations, net 160 (19) (30) Net income (loss) $ (718) $ 1,299 $ 886 Other comprehensive income (loss):Gain (loss) from available-for-salefinancial assets $ (10) $ (6) $ 34Actuarial loss from defined benefit plans - - (32) Total other comprehensive income (loss) $ (10) $ (6) $ 2 Total comprehensive income (loss) $ (728) $ 1,293 $ 888 Net income (loss) attributable to:Equity holders of the Company $ (689) $ 1,197 $ 968Non controlling interests (29) 102 (82) $ (718) $ 1,299 $ 886Total comprehensive income (loss)attributable to:Equity holders of the Company $ (699) $ 1,191 $ 970Non controlling interests (29) 102 (82) Net income (loss) $ (728) $ 1,293 $ 888 Basic and diluted net earnings (loss) pershare attributable to Company's equityholders (note 5)Earnings from continuing operations $(0.01) $ 0.01 $ 0.01Earnings from discontinued operations - - - Net earnings (loss) per share $(0.01) $ 0.01 $ 0.01 EMBLAZE LTD. AND ITS SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY U.S. dollars in thousands Non- Share Share Treasury Available-for- Accumulated controlling Total capital premium shares sale reserve deficit Total interest equity Balance as of January 1,2012 $ 416 $ 469,864 $ (75,555) $ 98 $ (252,282) $ 142,541 $ (266) $ 142,275 Net income - - - - 968 968 (82) 886Other comprehensiveincome (loss) - - - 34 (32) 2 - 2Total comprehensiveincome (loss) - - - 34 936 970 (82) 888 Cost of share basedpayment - 47 - - - 47 4 51Purchase of treasurystock - - (720) - - (720) - (720) Balance as of December31, 2012 416 469,911 (76,275) 132 (251,346) 142,838 (344) 142,494 Net loss - - - - (689) (689) (29) (718)Other comprehensive loss - - - (10) - (10) - (10)Total comprehensive loss - - - (10) (689) (699) (29) (728) Cost of share basedpayment - 20 - - - 20 - 20Purchase of treasurystock - - (687) - - (687) - (687) Balance as of June 30,2013 (unaudited) $ 416 $ 469,931 $ (76,962) $ 122 $ (252,035) $ 141,472 $ (373) $ 141,099 EMBLAZE LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Six months ended Year ended June 30, December 31, 2013 2012 2012 Unaudited AuditedCash flows from operating activities: Consolidated net income ( loss) $ (718) $ 1,299 $ 886Less - gain (loss) from discontinuedoperations 160 (19) (30) Income (loss) from continuing operations (878) 1,318 916 Adjustments to reconcile income fromcontinuing operations to net cashprovided by (used in) operatingactivities :Depreciation 16 15 30Cost of share-based payment 20 22 51Change in financial assets at fair valuethrough profit or loss 328 - (70)Decrease (increase) in accrued interestfrom assets at fair value through profitor loss, short term deposits andrevaluation of restricted deposits, net 263 (294) (614)Interest received-adjustment (1,411) (854) (1,426) (784) (1,111) (2,029) Changes in asset and liability items:Decrease (increase) in receivables andprepaid expenses 109 (150) 35Decrease in trade payables, deferredrevenues, accrued expenses and otherliabilities, net (580) (867) (3,103) Interest received 1,411 854 1,426 Net cash provided by (used in) operatingactivities from continuing operations (722) 44 (2,755)Net cash provided by (used in) operatingactivities from discontinued operations (146) 5 5 Net cash provided by (used in) operatingactivities $ (868) $ 49 $ (2,750) EMBLAZE LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Six months ended Year ended June 30, December 31, 2013 2012 2012 Unaudited Cash flows from investing activities:Purchase of property and equipment, net $ (11) $ (17) $ (38)Investment in short-term bank deposits - (105,792) (122,000)Maturing of short-term bank deposits 9,900 - -Purchase of financial assets at fairvalue through profit or loss (12,712) - (15,133)Proceeds from sale of financial assets atfair value through profit or loss andavailable for sale financial assets 1,382 10 1,713 Net cash used in investing activities (1,441) (105,799) (135,458) Cash flows from financing activities: Repurchase of own shares, net (687) (215) (720) Net cash used in financing activities (687) (215) (720) Net decrease in cash and cash equivalents (2,996) (105,965) (138,928) Cash and cash equivalents at thebeginning of the period 9,333 148,261 148,261 Cash and cash equivalents at the end of $ 6,337 $ 42,296 $ 9,333the period. NOTE 1:- GENERAL Emblaze Ltd. ("Emblaze" or "the Company") is an Israelicorporation. The Company's shares are traded on the London Stock Exchange("LSE") under the symbol BLZ. EMOZE Ltd. ("EMOZE"), a provider of Push email and PersonalInformation Management ("PIM") synchronization to mobile users, is a 95% ownedsubsidiary of Emblaze. ELSE Ltd. ("ELSE"), a 99% owned subsidiary of Emblaze, was engagedin the design of advanced mobile devices. NOTE 2:- BASIS OF PREPERATION a. Statement of compliance : The Company changed its financial reporting principles from generally acceptedaccounting principles in the United States ("U.S. GAAP") to InternationalFinancial Reporting Standards ("IFRS"). The Company consolidated financialstatements for the year ended 31 December, 2012 were the Company's initialannual financial statements prepared in conformity with IFRS. This consolidated interim financial statements of 30 June, 2013 and for thesix month periods then ended ("interim consolidated financial statements")have been prepared in accordance with IAS 34 - "Interim Financial Reporting".The interim consolidated financial statements should be read in conjunctionwith the annual consolidated financial statements for the year ended 31December, 2012, which have been prepared in accordance with IFRS as mentionedabove. See Note 6 regarding the impact of the transition from reporting in accordancewith U.S. GAAP to reporting in accordance with IFRS on the consolidatedstatement of comprehensive income for the six months ended 30 June, 2012. b. Judgments and estimates : In preparing these interim consolidated financial statements, Management makejudgments, estimates and assumptions that affect the application of accountingpolicies and the reported amounts of assets and liabilities, income andexpense. Actual results may differ from these estimates. The significant judgments made by Management in applying the Company'saccounting policies and key sources of estimation uncertainty were the same asthose that applied to the consolidated financial statements as at and for theyear ended 31December, 2012. NOTE 2:- BASIS OF PREPERATION (Cont.) c. Significant accounting policies : Except as described below, the accounting policies applied in these interimconsolidated financial statements are the same as those applied in theCompany's consolidated financial statements as at and for the year ended 31December, 2012. The following changes in accounting policies did not have amaterial effect on the financial statements. Changes in accounting policies: - IAS 19 Employee benefits (2011) - IFRS 10 Consolidated Financial Statements (2011) - IFRS 11 Joint Arrangements. - IFRS 13 Fair Value Measurement. - Presentation of items of Other Comprehensive Income (Amendments to IAS 1) NOTE 3:- SUPPLEMENTARY INFORMATION During the period between January 1, 2013 and June 30, 2013 theCompany has purchased 923,898 of its own shares through the market in anamount of $687, net of related expenses. The Company now holds 30,587,902 ofits shares in Treasury, including shares which have been purchased up untilthe interim period but registered after June 30, 2013. Following the sharerepurchase, the number of shares in issue (excluding shares held in Treasury)is now 109,990,252. The total issued share capital of the Company as at June30, 2013 is 140,578,154. NOTE 4:- LEGAL PROCEEDINGS 1. Emblaze, and some of its directors and officers, were nameddefendants in a few proceedings in the context of Bankruptcy proceedingsbrought personally against Mr. Eli Reifman, a former director of the Company.As part of his fiduciary and regulatory obligations, Mr. Reifman was requiredto timely report to the Company of changes in his shareholding position. Mr.Reifman's reports were duly reflected in the Company's annual and immediatereports, respectively. Several of Mr. Reifman's creditors have filed claimsagainst numerous parties, as well as against the Company and some of itsdirectors and officers, asserting reliance on information provided by theCompany with respect to Mr. Reifman's holdings in the Company. Some of theclaims were directed at the Company, and some also named part of its directorsand officers as defendants, as detailed here below: a. In November 2010, a claim was filed against the Company and itssubsidiary, ELSE Ltd., in the Tel Aviv Labor Tribunal, claiming fortermination indemnities in respect to an employment cessation of a formeremployee. The amount of the claim is NIS 2,700,000 (approximately $ 746 as ofJune 30, 2013). The claim against the Company was withdrawn in December 2011.In May 2013, the claim against ELSE Ltd. was dismissed by settlement betweenthe parties according to which ELSE Ltd's agreed to make an ex-gratia releaseof pension funds already accrued to the benefit of the former employee in anamount of approx. NIS 179,000 (approximately $ 49 as of June 30, 2013). NOTE 4:- LEGAL PROCEEDINGS (Cont.) b. In April 2012, two of Mr. Reifman's creditors filed a claimagainst the attorneys that represented them in their transaction with Mr.Reifman, alleging malpractice, negligence and failure by their attorneys toproperly secure their loans to Mr. Reifman. As part of this claim, the twocreditors have also named Emblaze, and some of its directors and officers, aswell as the Company's external legal advisor and auditors, as defendants for"caution reasons". The claim is for a sum of NIS 73,340,642 (approximately $20,271 as of June 30, 2013). The claim was referred by the court to mediationbetween the various parties. c. In June 2012, several other creditors of Mr. Reifman filed aclaim against Emblaze, some of its directors and officers as well as againstits external legal advisor and auditors. The claim is for a sum of NIS86,549,093 (approximately $ 23,921 as of June 30, 2013). In June 2013 theDistrict Court has accepted in-part the request for dismissal filed by theCompany and some of its directors and officers. The District Court dismissedthe claim with respect to two of the claimants, thus reducing the total sum ofthe claim to NIS 81,755,986 (approximately $ 22,597 as of June 30, 2013). TheCompany still waits decision of the Supreme Court on its appeal against thepermission granted on December 26, 2011 by the Bankruptcy Court in Israel tothe trustee to Mr. Reifman's bankruptcy to represent the majority of the Mr.Reifman's creditors in this claim. d. In November 2012, two creditors of Mr. Reifman have filed aclaim for NIS 30,000,000 against the attorneys involved in their transactionswith Mr. Reifman. The said attorneys submitted a third-party notificationagainst numerous parties that were involved in the transaction, as well asagainst Emblaze and some of its directors and officers, asserting that theyare to be indemnified in the event that the claim will be ruled against them.The third party notification is for a sum of NIS 7,600,000 (approximately $2,100 as of June 30, 2013). On December 25, 2012, the said attorneys alsofiled an application to join the Company as one of the defendants in the claimfiled against them. While the cases described above in sections 1(b), (c) and (d) arestill in preliminary stages, the Company's legal advisors are of the opinionthat the chances of success of these claims are remote. e. At the request of the Administrator for Mr. Reifman's bankruptcy(who was later appointed as the trustee to Mr. Reifman's bankruptcy), the Tel-Aviv District court issued an ex-parte temporary injunction on September 6,2010, ordering the Company to withhold 27.75% of any dividend the Company maydecide to distribute, to be held in trust by the General Administrator andOfficial Receivers Department of Israel's Ministry of Justice. The Courtclarified that any such amount belongs to all Company's shareholders.Following an appeal filed by the Company, the Supreme Court cancelled theinjunction on November 29, 2010, and limited the Company's responsibility onlyto notification obligation in case a decision on dividend distribution ismade. 2. The Company and/or its subsidiaries may be involved in variouslegal disputes within the ordinary course of business. The Company'smanagement is of the opinion that at this point the potential exposure of suchdisputes is immaterial. NOTE 5:- EARNINGS PER SHARE Six months ended Year ended June 30 December 31 2013 2012 2012 Unaudited Audited Number of shares used for calculation ofearnings per share - Basic 111,325,572 111,710,807 111,498,570Adjustments for share options 34,548 5,516 11,180Number of shares used for calculation ofearnings per share - Diluted 111,360,120 111,716,323 111,509,750 Continuing operations:Net income (loss) from continuingoperations $ (941) $ 1,267 $ 916Basic and diluted earnings per share toCompany's shareholders $ (0.01) $ 0.01 $ 0.01 Discontinued operations:Net income (loss) from discontinuedoperations $ 160 $ (19) $ (30)Basic and diluted earnings per share toCompany's shareholders $ - $ - $ - Total earnings (loss) per share $ (0.01) $ 0.01 $ 0.01 NOTE 6:- RECONCILIATIONS OF THE CONSOLIDATED FINANCIAL STATEMENTSUNDER US GAAP TO CONSOLIDATED FINANCIAL STATEMENTS UNDER IFRS a. Company reconciliation of total comprehensive income for the sixmonths ended June 30, 2012: Effect of transition to IFRS and IFRS as at other June 30, US GAAP adjustments 2012 Revenues $ 893 $ - $ 893 Cost of sales 224 - 224 Gross profit 669 - 669 Operating expenses: Research and development 820 - 820 Selling and marketing 376 - 376 General and administrative (2) 1,411 (35) 1,376 Total operating expenses 2,607 (35) 2,572 Operating loss 1,938 (35) 1,903 Financial income (1) 1,234 11 1,245 Financial expense 26 - 26 Other income 2,002 - 2,002 Profit for the year from continuing operations 1,272 45 1,318 Profit from discontinued operations, net (19) - (19) Profit for the year to Company's shareholders $ 1,253 $ 45 $ 1,299 Other comprehensive income : Loss from available-for-sale financial assets $ - $ (6) $ (6) Actuarial loss from defined benefit plans - - - Total comprehensive income for the year to Company's shareholders $ 1,253 $ 39 $ 1,293 b. Notes to reconciliations: 1. Accordingly to reclassification of financial assets presentedas short-term investments under US GAAP to available-for-sale financial assetsunder IFRS in accordance with IAS 39, gains and losses from fair valueadjustments are recognized to other comprehensive income. 2. Adjustment of post-employment benefits from undiscounted methodunder US GAAP to an actuarial calculation (projected unit credit method) underIFRS. Under IFRS actuarial gains and losses are included in othercomprehensive income in the period in which they arise.